Feature Differentiation

If you’re building an “OSS + SaaS” product, you’re walking a fine line. You want the open source version to be genuinely useful - because that’s how you’ll build trust, community, and adoption. But at the same time, your SaaS has to be compelling enough that people actually want to pay for it.

You can’t cripple the open source project, or no one will use it. But if you give too much away, the SaaS won’t make money. The art is in knowing what to give, what to sell, and how to manage the evolution of both.

Picking Features That Fit

There’s no universal formula, but here’s a mindset that helps keep things healthy:

Make Open Source Stand Alone

Your open source version should stand on its own. If someone self-hosts it, they should be able to use it for real work, not just “play around.”

What you don’t need to give away:

• Things that are a pain to self-manage (e.g. background jobs, alerts, backups)
• Cloud-specific scaling features (e.g. CDN, rate limiting, regional failover)
• “Nice to have” integrations (Slack, Teams, SSO, etc)

But give them a clean core:

• All the CRUD
• Good UI/UX
• Local auth
• Local data
• Real documentation

Offload Annoying Stuff to SaaS

A great heuristic: if it’s annoying to self-host, it’s perfect for the SaaS.

This includes:

• Scheduled jobs
• Delivering email
• SMS or phone call integration
• Third-party rate limits (e.g. APIs with tokens or quotas)
• Hosting dashboards or analytics that require persistent compute
• Webhooks or callback endpoints

These things can be technically feasible in OSS, but are just… gross. Most users would gladly let someone else deal with them.

Gate Complexity, Not Coolness

Too many people put their “coolest” feature behind a paywall. That’s backwards.

Instead, put your most complicated, costly, or enterprise features behind the paywall. That way, the project stays usable and interesting, but the overhead is what drives people toward SaaS.

Drip Features Over Time

This is a good one! Let the SaaS product get everything first - but after 12, 18, or 24 months, upstream some features to OSS.

That way:

• You reward your paying customers with early access
• You make the OSS better over time (without cannibalizing yourself right away)
• You signal that OSS isn’t “frozen” - it’s just slower

This also forces you to think carefully about what’s genuinely differentiating. After a year, if nobody really needed Feature X, maybe it should be OSS.

Try Unusual Feature Splits

Here’s some novel, useful lines to consider when splitting features:

Dodge the SaaS Trap

Don’t assume that your goal is to shove every new idea into the paid version. If your OSS project becomes stale, or the SaaS becomes bloated, both suffer.

Instead:

• Keep the OSS fresh and useful - treat it like a garden, not a graveyard.
• Keep the SaaS focused and maintained - don’t let it become “enterprise-only.”

Release Schedule

Here’s an example of a release schedule for both the OSS and SaaS versions:

Summary

There’s no perfect blueprint - but there are some principles that can help:

• Make your OSS version stand on its own. Not just a teaser.
• Put painful, expensive, or “ops-heavy” features in SaaS.
• Time-gate advanced features if you want to give them to OSS later.
• Let OSS earn trust. Let SaaS earn revenue.

Your best users will start with OSS, and grow into SaaS - if you give them a reason to.